It’s a nice problem to have, but it’s also a sign that it’s time for change.
It might give you the option to be more selective about who you work with, narrowing your client base down to a specific niche and developing your own specialism.
But if you have ambitions for growth, it could also be an opportunity to build your business into something bigger, turning your one-person operation into a full agency.
From structure to staff, here’s what you should be thinking about as your business grows.
What’s the best structure for an agency?
If you’ve been working alone up until now and haven’t registered your business as a limited company, the chances are you’re operating as a sole trader or in a business partnership. With these legal structures, your business and personal finances are one and the same.
As the cost of running your business increases and you invest more in staff, equipment and premises, this setup can become risky – in the event your business loses money and goes into debt, you’ll be personally liable and could even end up losing assets like your house, car and other possessions.
For that reason, alongside other factors, such as potential tax savings, you might want to think about incorporating your business before you grow it.
There are pros and cons to every business structure, though, and a limited company isn’t right for everyone, so it’s always best to get professional advice before you make a decision.
At an organisational level, you’ll also need to think about how the structure of your business will work when you hire more people.
A strict hierarchical structure with distinct divisions is often the easiest to manage effectively, but structures that are more project or client-based can also be a good way to bring together people with complementary specialisms.
Either way, it’s important to be clear about what each member of the team will be responsible and accountable for, and to make sure they understand what’s required of them.
Taking on your first employees
Compared to working for yourself, becoming an employer comes with a whole new set of responsibilities.
For one thing, you’ll need to set their pay and make sure you’re meeting minimum wage requirements.
As of 1 April 2021, the national living wage of £8.91 an hour applies to people aged 23 and older, but other rates apply to younger age groups and apprentices.
Of course, you’ll also need to think about the kind of skills you need on your team, and the average salary for the role.
Setting your employees’ pay is often a balancing act between setting a rate that’s affordable for your business, and making sure it’s competitive enough to attract the right talent.
Your other obligations as an employer include:
- finding out whether your new employee has the right to work in the UK
- getting employers’ liability insurance as soon as you become an employer
- sending details of the job in writing to your employee, and providing a written statement of employment if you’re employing them for more than a month
- registering as an employer with HMRC and setting up pay-as-you-earn (PAYE)
- auto-enrolling your staff into a defined-contribution workplace pension if they are between 22 and state pension age, and earn more than £10,000 a year.
If taking on employees feels like too much of a commitment at this stage, you could consider filling in the gaps in other ways, such as by outsourcing work to freelancers or contractors.
Setting up your finance and billing system
If you’re currently self-employed, you should already have some form of record-keeping and accounting system in place.
When you start growing, however, it becomes even more important to make sure this system is running as smoothly as possible. That way, you can spend less time sorting out your accounts as work gets busier, and more time overseeing the agency’s development.
Streamlining your invoicing system is also important to keep the payments coming in.
Accounting software, such as QuickBooks or Xero, allows you to set up invoice templates that can be automatically filled in and sent out to clients. You should also be able to set up email reminders to give your clients a nudge and get paid faster.
Get in touch to talk about growing your creative agency.